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Is The Middle East Ready For The Digital Banking Revolution?

September 02, 2022  •  5 minute read

In conversation with Konica Khandelwal –
GM Global Banking (EU, APAC, MEA) and VP Sales, Middle East at Yellow.ai

Digital Banking in the Gulf – Keeping pace with consumers in a fast-moving marketplace as they go digital thereby paving the ground for fintech innovation and ushering in the digital banking revolution. Presently, the fintech sector in the Middle East amassed a 30% (CAGR) in the past year with the predicted capital funding to reach 2 billion USD by the end of 2022. Konica presented us insights about the digital transformation in banking, the new face of retail banking in the Gulf and the fast adoption of digital banking technologies like Conversational AI for driving growth.


Q. Omnichannel Banking on-demand – are the Mainstreet banks ready to implement new systems like conversational automation and drive growth?

There’s a complete overhaul in the way we bank, moreso, in the retail banking industry. Multiple factors like technology and innovation, increasing competition, regulatory complexity, and evolving customer expectations are placing immense pressure on traditional business models. At one end, the brands are competing among themselves to not just stay relevant but stay on top of their customers’ mind in a digital retail space and on the other hand, customers are spoilt for choice. The timeless trusted bank syndrome is increasingly being challenged by the more digitally savvy generations who demand instant access, transparency, convenience and lower transaction costs. In short, it’s the era of ‘banking at your fingertips’!
Research has found that 99% of Gen Z and 98% of millennials prefer mobile banking for various transactions and tasks, like checking their account balances, viewing their credit score and making deposits. Now, banks need to not just up their customer messaging capabilities, but they also need to ensure personalised support to all customers — on-demand, omnichannel and omnilingual.
Time-saving, improved efficiency of banking personnel, personalized attention, reduced cost per customer support, round-the-clock support.

Q. What according to you are the three main challenges that will define the future of retail banking?

High abandonment rates, data storage & management, detailed & personalized conversations.

One of the biggest challenges banks face today is the gamut of digital transformation required across various banking processes including internal to customer-facing processes. In the wake of the Covid 19 pandemic, many operations had to be either suspended or run on a limited capacity for banks where remote working capabilities were not yet established. Also, while banks are focusing on transactional coverage, customers are expecting transactional, service-related, and even advisory services to be made available, and on the channels of their choice. 

Additionally, banks have tried to get the human out of the loop and it has only messed up the support process. Witness IVRs, mobile apps, FAQs on websites, and phone numbers buried where no one can find them. Thus, the key is to bring humans back in the loop, but maximize on their talents by allocating them for critical-case handling and not mundane queries.
Last but not the least, consumers expect banks to have a complete understanding of their unique needs and deliver personalized banking experiences for them. Very few claim their banks to have achieved this personalization journey for them. Most of banks find themselves incapable of determining the right product offering on an individual basis for upselling. 

Q. Is the region warming up to the idea of Neo banks? How do you see Conversational AI-based banking solutions as a technological disruptor in intensifying the trends of Neo banks?

Neo-banks, which are sometimes referred to as “challenger banks,” are fintech firms that offer apps, software and other technologies to streamline mobile and online banking. These new-age digital-only banks are steadily transforming the banking sector and can be compared to what Airbnb did to the hospitality industry or Uber did to private transportation.

Middle East countries recently have also made notable progress in the neo-banking sector with countries like Bahrain, Israel, Saudi Arabia, and the UAE witnessing the launch of these new digital-only banks. The crux of this developmental wave is undoubtedly technological innovations which offer improved efficiency and customer service. The digital-only banking charter by the Saudi Arabian Monetary Authority (SAMA) has given birth to neo-banks like Bank ABC, CBD Now, Mashreq Neo and many more to watch out for.

It would be interesting to gauge the pivotal role that Conversational AI is going to play in this sector to deliver intelligent, personalized solutions at scale in real-time for these banks to thrive. 

ABA Banking Journal article highlights the value of combining human experts, and technology to survive the “new normal”.

“Best practice would be to consider a solution that includes a human-expert validation step. There are far too many nuances in regulatory compliance change events to leave it entirely to the machines.”
– Elaine Duffus, Wolters Kluwer Senior Specialized Consultant


How well-equipped Yellow.ai’s AI + Human platform is to provide the best solutions for retail banking?

With AI-enabled agents, the speed of query resolution and customer support have been minimised to the least, i.e., 4 minutes per query. Conversational AI is emerging as a game changing technology for the financial sector.

  • Online banking has allowed consumers to perform certain bank transactions outside working hours, such as online payments and fund transfers. Like all bank transactions, issues and problems can arise from these situations — smart AI agents can provide the support and answers consumers need right then and there, even during holidays or outside business hours.
  • Dynamic AI agents can handle CX requests on multiple channels, locations, languages and integrations — with one seamless solution. Banks can offer 24/7 customer support in multiple languages and Arabic adherence is big in this region.
  • Dynamic AI agents can be created through fast, no-code deployments.
  • Tracking branch locations, business hours, local promotions, holidays and more is crucial to local banking. Clumsy old chatbots weren’t capable of fully covering this particular need. But new dynamic AI agents can.

Unika Prusty

Unika handles all communications to and through the partners at Yellow.ai. Owing to her journalistic background she enjoys doing focused interviews, blogs, and thought leadership kind of content. As a communicator, her strength lies in mapping, defining, and placing context to everything that's being communicated. She thrives on chai and long hearty conversations.
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